Small miners attract buyers

Most investors may be on edge with the European financial crisis threatening to engulf the global economy, but fund managers appear to be betting on a positive resolution to the problem if their buying behaviour is anything to go by.

The professionals, if anything, appear to be doing more buying than selling in this depressed market ahead of last Friday’s critical meeting of European Union leaders to stem the sovereign debt contagion.

Interestingly, smaller miners have attracted the attention of fund managers despite the loss of risk appetite in the market.

Acorn Capital has bought a substantial 7.2 per cent stake in junior iron ore explorer
Red Hill Iron
, which is working towards developing an iron ore mining and export operation for its West Pilbara iron ore project.

AFR
AFR

The Department of Mines and Petroleum has granted approval for project construction and mining operations in the September quarter.

Acorn has also emerged as a key shareholder in oil and gas explorer
New Standard Energy
, which is focusing on a number of West Australian onshore unconventional shale projects. The junior recently secured a partnership with global energy giant ConocoPhillips to fund and build the Goldwyer shale gas and liquids project in the Canning Basin.

Embattled steel maker
BlueScope Steel
has also found some support as it struggles to bounce off a record low of 38¢ hit two weeks ago.

The Government of Singapore Investment Corporation, Singapore’s sovereign wealth fund, upped its holdings in the company to 6.3 per cent from 5.1 per cent last week. While BlueScope’s outlook remains challenging due to the strong Australian dollar and carbon tax, some experts believe the risks are more than reflected in its current share price.

Technology company
Nexbis
’s shares were snapped up by Sun Hung Kai Investment Services following news Agathis Three has made a conditional bid of $79.8 million for the company. The bid is seen to be a management buyout as Nexbis’s chief executive, Johann Young, is believed to have an economic interest in Agathis.